Manufacturing output fuels recovery

News Article - 08 June 2010
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Manufacturing output has risen significantly, providing a much-needed boost to UK GDP growth expectations. Recent data from the Office for National Statistics revealed a 2.3% increase in output during March. This is the strongest month-on-month increase in close to eight years and may suggest a faster pace of economic recovery in Q1 2010, ahead of the 0.2% predicted by experts.

Twelve of the 13 main manufacturing sub-sectors experienced a rise in output, with basic metal and metal products (3.9%), paper, printing and publishing (2.7%), and machinery and equipment (4.2%) industries enjoying the largest gains. Textiles, leather and clothing was the only sub-sector to decline in output, with a 0.5% reduction.

Leading figures from professional services firm PricewaterhouseCoopers and Barclays Corporate have suggested the rise in manufacturing output may lead to an increase in mergers and acquisitions. The sector suffered heavily during the economic downturn and has been looking to bounce back strongly and regain valuable market share on both a domestic and international level. 

Graeme Allinson, head of manufacturing at Barclays Corporate, believes the UK's recent growth is indicative of similar trends in other international markets where economic stability has boosted manufacturing output. The relatively undervalued British manufacturing sector - due to UK markets inadequately recognising the significance of recovery within manufacturing industries - may now attract international buyers who wish to expand into the UK relatively inexpensively.

Manufacturing companies will no doubt be encouraged by the pan-sector increase in output in the first few months of 2010. This is a positive sign for both the manufacturing sector and the British economy as a whole, and - whilst not indicative of wide scale economic recovery - shows the economy is starting to stabilise following a turbulent and uncertain two years.

All manufacturing firms must make the most of favourable market conditions by improving internal efficiency and ensuring all operations are conducted as cost-effectively as possible. Whilst output is increasing, uncertainty over supply and demand can quickly affect companies that are not sufficiently equipped to deal with abnormal market swings.

Access business software offers powerful, system-wide control over manufacturing processes - project and job costing, for example, provides flexible, detailed reports and sales revenue can be allocated to individual jobs, giving the option to analyse profitability by product, customer or any other category. This allows manufacturing companies to remain in control of output, ensuring projects are always undertaken with full financial considerations in mind.

For more information, please call Access on 0845 345 3300.

Article keywords: UK GDP growth, Office for National Statistics, PricewaterhouseCoopers, Barclays Corporate, manufacturing output, mergers and acquisitions, economic downturn, Graeme Allinson, manufacturing sector, manufacturing industries, economic recovery, Access business software, manufacturing processes, project and job costing

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